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Brussels backtracks on threat to UK budget rebate if Brexit is cancelled

·Brussels correspondent
EU budget commissioner Gunther Oettinger (EFE)
EU budget commissioner Gunther Oettinger (EFE)

The European commission has performed a major Brexit U-turn by confirming the UK will keep its budget rebate if it stays in the EU.

EU budget commissioner Gunther Oettinger has said previously that the 66% rebate on UK contributions negotiated in 1984 by then prime minister Margaret Thatcher is “no longer appropriate.”

“The gradual exit from the rebate would still be kept,” he said in October about the possibility that Brexit could be called-off.

But, in a huge boost to anti-Brexit campaigners, the German politician changed his position on Tuesday in light of an explosive legal opinion by the EU’s advocate general which said the UK should be able to unilaterally revoke Article 50.

MORE: UK can’t keep rebate worth billions if it abandons Brexit, says EU budget chief

Answering a question from Yahoo Finance UK, Oettinger said: “The rebate which was negotiated by Mrs Thatcher – this is something which is permanent and needs to be respected.”

Confirmation that the UK could remain in the EU on its current membership terms is another blow to efforts by the UK government to get the Brexit deal through the UK parliament on December 11.

Environment secretary Michel Gove has raised the rebate, which was worth £4bn ($5bn) in 2016, as a reason that MPs should back the deal.

“Keeping the rebate? Forget about it,” Gove wrote in an article for the Daily Mail which warned the UK would be forced to accept “far tougher terms” if Brexit is cancelled.

Michael Gove campaigning for the Vote Leave campaign during the 2016 EU referendum (Getty)
Michael Gove campaigning for the Vote Leave campaign during the 2016 EU referendum (Getty)

Labour MP Jo Stevens, who is backing the People’s Vote campaign, accused Brexiteers of “spreading falsehoods.”

Oettinger’s comments prove “the choice before Parliament is between the Brexit deal on offer and our current deal as full voting members of the EU with our budget rebate,” she said.

“The claim that our current deal would not be open to us if we decide to stay is nonsense and the opinion from the European Court this morning only underlines that,” Stevens added.

MEP Philippe Lamberts, a member of the European Parliament Brexit steering group, also said the legal opinion “reminds us that it’s still possible for the UK to step back from the brink.”

MORE: EU and UK join forces against Brexit legal challenge

“UK MPs should know that there is a way out of this, should they wish to re-join the European family,” added the Belgian.

But EU expert Fabian Zuleeg said the legal opinion “makes little real difference” to the situation.

“The UK can’t use this as a mechanism to buy time or suspend the process,” said the chief executive of the European Policy Centre.

“It would need a real, committed decision to stay” by the UK, he pointed out, saying that was “unlikely.”

Oettinger said on Tuesday that the EU will “proceed on the assumption that there will be a transitional phase” that will follow Brexit if a deal is agreed by MPs.

“As regards the discussion in London, should there be any fundamental change then we will have to look at that then,” he said.